Commentary

Consumer Financial Protection Bureau Will Keep Complaint Database Public

Despite previous pushback from the financial firms it oversees, the Consumer Financial Protection Bureau is not only going to keep its complaints database public, it’s going to improve it for the benefit of the citizenry.

“The CFPB complaints database, which went public in 2012 to boost transparency of consumer issues, is a key source of investigations by the agency. Financial firms such as credit reporting agencies, debt collectors, mortgage lenders and pay day lenders have long complained about being publicly named and say complaints should be verified before being posted,” writes  Reuters’ Katanga Johnson.

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Yesterday’s decision “comes after the agency put out a call for public input on its consumer inquiry and complaint database in 2018 while it was under the direction of Mick Mulvaney, who now serves as the acting White House chief of staff. The move was seen as a sign that the agency would make the database private, a change that would be welcomed by many in the financial-services industry,” Jacob Passy writes  for MarketWatch.

“Mulvaney had said that the agency shouldn’t need to run a ‘Yelp for financial services, sponsored by the federal government,’” Passy adds.

“Since its inception, the Consumer Complaint Database has not been without controversy. When the Bureau asked for feedback in 2018, we received nearly 26,000 comments from a wide array of stakeholders including government officials, consumer groups, companies, academics, and individual consumers,” CFPB director Kathleen L. Kraninger states  in the news release announcing the decision.  

“After carefully examining and considering all stakeholder and public input, we are announcing the continued publication of complaints with enhanced data and context that will benefit consumers and users of the database while addressing many of the concerns raised,” she continues.

Speaking at a consumer conference in Rosemont, Illinois, yesterday, Kraninger said that “the bureau would add new features to help consumers contact companies and research answers to common questions. The bureau will also release data visualization and analysis tools to help people interpret the data in context,” Stacy Cowley reports  for The New York Times

Specifically, the CFPB says it is making changes to its website to provide disclosures on the nature of complaints as well as resources to consumers, including:

  • Modified disclaimers to provide better context to the published data;
  • Integrating financial information and resources into the complaint process to help address questions and better inform consumers before they submit a complaint;
  • Information to assist consumers who wish to contact the financial company to get answers to their specific questions.

The CFPB “has ratcheted up investigations and enforcement actions in the past few months, an apparent shift by the agency under director Kathy Kraninger, who had initially signaled that supervision would be the primary focus in her tenure,” Kate Berry writes  for American Banker.

“Kraninger has called more attention to enforcement in recent speeches and public comments. And financial firms are receiving more civil investigative demands and notices alerting them of possible enforcement actions, lawyers say. The notices are similar to those issued under former CFPB Director Richard Cordray,” Berry continues.

A least some industry heavyweights are going with the flow.

“The Mortgage Bankers Association appreciates the Bureau’s willingness to make changes to the Consumer Complaint Database so it will be a better resource for consumers and provide a more accurate depiction of industry performance,”  says Robert D. Broeksmit, MBA president and CEO, in a statement. 

And what’s to complain about complaints anyway?

In a piece for American Banker in May, Marcia Tal, a former Citigroup executive who runs the data analytics firm Tal Solutions, addressed the industry’s conventional wisdom of challenging the validity of "‘mere" inquiries being classified as complaints.

“Customer voices are a business’ most valuable asset and need to be taken seriously -- whether they are categorized as complaints or inquiries. When people turn to the CFPB with a complaint or an inquiry, they have an issue that hasn’t yet been resolved,” she points out.

“When treated as strategic assets, complaints -- regardless of how they are categorized and regardless of their volume -- can become a critical part of a financial institution’s success. Exploring complaint data, like the data in the CFPB database, can help institutions identify issues before they lead to the next big story or regulatory risks, predict and prevent future problems and, ultimately, uncover new business opportunities for growth,” Mal concludes.

There’s a lesson there for any enterprise.

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